22/07/2010 - 00:00

Primewest goes against the flow

22/07/2010 - 00:00

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SINCE its establishment in the early 1990s, Primewest Management has built one of Western Australia’s largest property investment firms on the back of finding value where others don’t.

Primewest goes against the flow

SINCE its establishment in the early 1990s, Primewest Management has built one of Western Australia’s largest property investment firms on the back of finding value where others don’t.

The journey began in 1994 when Primewest directors John Bond, Jim Litis and David Schwartz bought a few property assets as like-minded investors.

Today, Primewest Management controls 55 syndicates holding property assets worth nearly $1.4 billion across three states, and the directors are seeking to establish a bigger profile east of the Nullarbor, in Queensland, Victoria and New South Wales.

Primewest syndicates invest in basically all types of property assets valued from $20 million to $100 million, except for residential units.

Its portfolio includes office buildings and shopping centres, bulky goods and retail developments and broad acre residential subdivisions.

Mr Bond said as long as Primewest could identify the chance to add value, it was interested in the investment.

“It’s more about the opportunity than the type of asset itself,” Mr Bond said.

“That’s why we like Brisbane at the moment, which a lot of people are worried about because the vacancy rate has been projected to be quite high.

“But that for us is the opportunity, with less people interested.”

Mr Schwartz said that, from the establishment of the business, a counter-cyclical investment strategy paid dividends.

He said the early 1990s was a successful time for Primewest, which was investing and getting good value from property assets when others were holding back.

Mr Schwartz said the company’s success today had largely been built on that counter-cyclical strategy, reflected by Primewest’s acquisitions of four commercial office buildings in Queensland, Victoria and Perth over the past year for $143.5 million.

“I would say that we are entrepreneurial, opportunistic investors,” Mr Schwartz said.

“The fact that over the last 12 months we’ve acquired nearly $150 million worth of property is quite indicative of that philosophy.

“Where most other buyers have gone to ground we are still pretty active in the market, and are continually acquiring good, top quality assets.

“We most certainly been able to get good value and we’ve been able to acquire top quality assets that, during the good times, don’t normally come to the market.

“The acquisitions we’ve made have been good, and the investors that have come along have enjoyed above-market growth.”

According to Mr Bond, last week’s announcement that Primewest had bought the Southern River Shopping Centre for $25.5 million was a “classic” example of the firm’s investment strategy.

Funded by a 50:50 equity-debt mix, the Southern River Shopping Centre syndicate was oversubscribed by $2 million.

“It was built five years ago, and we’re buying it now for less than what it cost five years ago to build,” Mr Bond said.

“There was a lot of vacancy in the bulky goods retail side, and before we settled we had interest in two of those shops and we’ve now signed leases within two days of settlement.

“We can see some upside there because there was a bit of uncertainty about the vacancy, and by working it hard, we think can get a better return than it looked like in the first instance.”

 

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